Is Wi-Fi tracking in stores an invasion of privacy?

January 30, 2014 at 11:51 PM EST - Updated July 20 at 8:30 PM

MYRTLE BEACh, SC (WMBF) - Think about this: you've browsed a store for a new pair of boots or maybe a new power tool. You don't buy anything, but later get a notification on your phone to save 10 percent on the same item you shopped in-store.

Is it a coincidence or an invasion of privacy? Experts say it's the future of shopping.

Everyone has a smartphone these days, from teens to parents, college students to the elderly. We don't put down our phones so we can be connected 24-7. And retailers have noticed. In fact, tracking your every move is a booming industry.

"It has changed the way we do business," says Michael Latta, CCU's Wall College Associate Dean. "If you can deliver an offer to them by their smartphone, while they're walking around in the store, you may keep them for a few more minutes and they may buy something else."

There are several different techniques retailers are using, from watching you on surveillance cameras to tracking your smartphone using Wi-Fi.

Cameras are used to track your every movement, from the moment you leave your car in the parking lot to your decision making over different products while you're standing in the aisle. They're recording you as you linger around the store and watching what items happen to catch your attention.

"They've evolved from theft prevention to marketing," Latta says. "They're using these cameras sometimes for real-time viewing, where they watch a consumer move around a store because they want to see what their travel pattern is, or they'll be looking for certain types of customers to use them in research to determine what type of customer buys what type of products."

Latta's been studying this type of marketing for years. He says retailers want to know everything about you, from what type of car you drive to the items you purchase.

"There are lots of things they can track over time to determine who is their core customer and who should be in their loyalty programs [and] which ones should get special offers, too," Latta says.

You can think of geofencing as a virtual fence, using GPS technology to block off a certain area that a marketer wants to target. They can then send notifications to anyone within that area right to their smartphones.

If you think this new technology is only being used by stores, think again. Coastal Carolina University is getting in on the new marketing techniques.

"The great thing about it is you can really drill down to a specific geographic region, specific market or locale," says Matt Hogue, CCU's Associate VP of Marketing.

"This past summer we were able to use it during the height of tourist season to engage potential students in campus visits," Hogue says. "We found a tremendous spike in our campus visits that were scheduled during the period that we used geofencing."

Wi-Fi tracking is another way retailers are following you. When you walk into a store, your smartphone or tablet can connect to the wireless system and essentially allow the retailer to know where you are in the store at any point.

"They're always trying to look to see what categories products you buy are in and make suggestions to you about what you should buy next," Latta says.

RetailNext is a company that analyzes shopper behavior and its website lists major chains you shop at everyday using this technology. From Family Dollar and Cache to Ulta, Brookstone even Verizon.

"Any of the large chains like Kroger, Walgreens, anything that is widespread across the country, they use this system. Especially with such a mobile population," Latta says. "It allows them to integrate information from any place in the country on a per customer basis and know exactly what to offer them in Illinois versus South Carolina versus Atlanta, Georgia versus wherever you go."

Latta says he's done research that shows consumers aren't as worried about retail tracking as they are government intrusion. In fact, if there's a way to save money at the end, most shoppers look forward to the notifications.

However, some legislators think you should have a say in whether or not you're getting tracked. Minnesota Senator Al Franken has introduced a bill that would make location data collection opt-in only. He thinks consumers have a right to privacy and should have to agree to share that information.

"People like control," Latta says. "Eventually they're the ones who decide whether or not this whole system that the companies have built is going to benefit the customer."

CCU's Hogue says they don't collect or store anyone's personal information. For them, it's just the way to do business in today's world.

"Our prospective students are on their phones, they're on their mobile device, that's how they communicate," Hogue says. "We have to be able to market in that space if we want to successfully tell them about Coastal."